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The high price of the Asian Games

SINGAPORE — In time, Singapore will have the necessary facilities to host the Asian Games — the world’s second-biggest multi-sport event after the Olympics — said Sport Singapore chief executive officer Lim Teck Yin.

Guangzhou shelled out S$25 billion to stage the 2010 Asian Games. PHOTO: GETTY IMAGES

Guangzhou shelled out S$25 billion to stage the 2010 Asian Games. PHOTO: GETTY IMAGES

SINGAPORE — In time, Singapore will have the necessary facilities to host the Asian Games — the world’s second-biggest multi-sport event after the Olympics — said Sport Singapore chief executive officer Lim Teck Yin.

However, if the Republic were to consider it, the cost and benefit of doing so must be attractive compared with staging other alternative global sporting events.

And it is on this criterion that the Asiad is unappealing, as the current financial structure weighs heavily in favour of the Kuwait-based Olympic Council of Asia (OCA) and its Dubai marketing agents Promoseven Sports Marketing.

The high price tag and low returns were revealed in a 2010 study by Hong Kong, who was preparing a bid to host the 2023 edition. It projected that it would be left US$1.7 billion (S$2.1 billion) in the red after footing HK$14 billion for the event.

The study also revealed the OCA constitution stipulates host cities must pay 33 per cent of all Games revenue, including sponsorship, and 100 per cent of television income to the Asian body “as contribution”. This is done after first paying commissions to Promoseven.

In addition, the OCA also gets one-third of all merchandising revenue and collects 25 per cent of ticketing sales, which it then distributes to sports federations.

Lim told TODAY that the OCA’s current revenue-sharing structure would weigh heavily in any consideration Singapore makes on the Asiad. “I think the Hong Kong study provides an interesting perspective that the OCA could perhaps take into consideration when strategising for the long-term sustainability of the Asian Games. It cannot be ignored,” he said.

The projected cost of the 2023 edition is slightly more than the US$1.6 billion South Korea has budgeted for this year’s Asiad in Incheon from Sept 19 to Oct 4, which is expected to attract more than 12,000 athletes.

In the previous four editions Busan paid US$2.9 billion in 2002, Doha coughed out US$2.8 billion in 2006 and, including spanking-new facilities, it was US$20 billion in Guangzhou at the 2010 Games.

The Games came under scrutiny after Hanoi last month pulled out of staging the 2019 event, with the Vietnamese government citing costs as the main factor. In the aftermath, the Olympic Council of Malaysia said its president Imran Tuanku Ja’afar met OCA top guns last year to suggest a better profit-sharing system for the Games but was rebuffed.

While costs are certainly a consideration, Lim said “the key issue is in having a clear sense of the strategic benefits for hosting such an event vis-a-vis other possibilities”. “So we do not simply look at a multi-sport event as something to aspire to, but ask the question what we would like to get out of it,” he added.

As far as the ability to host it, he said Singapore would have the capacity to do a good job as it is developing more sports facilities under the Government’s Sports Facilities Master Plan. These include the Sports Hub, which will be opened next month, and regional sports centres. The two large exhibition centres, Suntec and Singex, will boost the number of facilities available.

The Asian Games would be a great sports festival with world-class performances, but the costs of hosting other global sports events offer far more attractive terms.

Barcelona paid only €25 million (S$43.4 million) to stage last year’s 16-day FINA world swimming championships that had a 500-million global television audience. London expects to invest a total of £62 million (S$130.7 million) to host the 2017 IAAF World Championships, while the 2011 edition in Moscow saw a total global TV audience of five billion.

Lim said: “We have many other attractive alternatives in single-sport events that will allow for a sustained calendar over the course of a year. So the cost-benefit analysis (of the Asiad) must consider the attractiveness of the alternatives.”

Apart from next year’s SEA Games that Singapore will host, Lim said the quadrennial World Masters Games is an “interesting proposition” to consider. Last held in 2013, it features more than 20,000 athletes, has a minimum age limit of 25 to 35 depending on the sport and is popular with former Olympic athletes.

“The Games have also proven to be quite interesting from an economic benefits standpoint,” he said.

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